Crowdstreet’s online real estate investing platform has a new offering. The Ranches Build-to-Rent is a 79-unit townhome community that will be located in Ogden, Utah. The Ranches, which were originally built in 2018, offer residents a class-A living experience in an ideal location. Ogden itself is a strong submarket of Salt Lake City, Utah, and offers residents an ideal combination of convenience and access to the outdoors.
The market fundamentals of the Ogden area are also very attractive. It’s located in Weber County, where rents shot up 21% in 2021. In addition to that, the county is expecting to add 350,000 residents between now and 2065. This growth should generate a steady stream of tenants and solid demand for developments like the Ranches. The Ranches is also convenient to major employers like Hill Air Force Base and Weber State University.
The Ranches is being sponsored by Orion Real Estate Partners. It is seeking to raise $13.3 million in investor equity to complete the purchase.The total purchase price of $30 million translates to an average per-unit price of $379,000. This price is roughly $3 million less than the current replacement value of a development with similar quality.
Since the offering was completed so recently, it will only need a light renovation/refresh for the interiors and common areas. Current rents at the Ranches are averaging $1,621, or $1.31 per square foot, which is below the current average of $1.45 per square foot. Orion believes it will be able to increase rents beyond the current market rate and is projecting a closing rent of $1,949 per square foot.
- Minimum investment: $25,000
- Projected hold period: 3 years
- Projected internal rate of return (IRR): 16%
- Projected equity multiple: 1.5x
- Projected average annual cash yield: 4.3%
Based on Orion’s projections, a $100,000 investment will yield investors roughly $154,000 when it sells the property at the end of the hold period. The offering does accept self-directed IRA contributions. Offers must be submitted by August 8, 2022, and funded by August 10, 2022.
About The Project Sponsor
Orion Real Estate Partners is a real estate investment firm that operates out of multiple states in the western and southwestern United States. The firm specializes in finding value-add opportunities in the multi-family commercial sector. It currently has a portfolio of 2,100 units with an estimated total value of $420 million.
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Photo: Courtesy of CrowdStreet